L&H guarantee exams
If a producer transacts insurance without being appointed by the insurer, for all offenses, the insurer will pay: A) $500 B) $5,000 C) $10,000 D) $300
D) $300 (if a producer transacts insurance before an appointment with an insurer is granted, the insurer will have to pay a fine of $25 per offence [max $300])
An insured suffered a loss. In order to avoid having her claim denied, she must submit proof of loss within: A) 6 months B) 1 Year C) 15 days D) 90 days (according to the proof of loss provision, if proof of loss is not provided within 1 year of the date of loss, the claim may be denied. )
B) 1 Year (according to the proof of loss provision, if proof of loss is not provided within 1 year of the date of loss, the claim may be denied. )
If an insured is not entirely satisfied with a policy issued, the insured may return it to the insurance company and receive a refund of the entire premium paid, at which of the following times? A) within 10 days of when the insurer received the first premium B) within 10 days of when the policy was delivered C) before any claim has been filed on the policy D) within 10 days of when the policy was issued
B) within 10 days of when the policy was delivered (the free look period begins at the time the policy is delivered)
What is the maximum penalty per offence for transacting insurance without a certificate of authority?: A) $10,000 B) $100 C) $500 D) $1,000
D) $1000 (it is unlawful for any company to transact insurance business in this state without a certificate of authority from the commissioner. The penalty for this violation is between $100 and $1,000 for each offence)
Under the mandatory uniform provision Proof of Loss, the claimant must submit proof of loss within what time period after the loss? A) two years B) 30 days C) 60 days D) 90 days
D) 90 days (the proof of loss provision limits the time within which the insured may file a written proof of loss. A proof of loss must be filled within 90 days of loss or, in the case of continuing loss, within 90 days after the end of a period for which the insurer is liable)
Insurers are forbidden to do all of the following with their advertisements, EXCEPT: A) assume the readers or viewers of advertising material are familiar with insurance terminology B) mislead readers or viewers of coverage provided under a policy C) use words or phrases that exaggerate the terms of policy D) promote interest in insurance coverage
D) promote interest in insurance coverage (advertising may be used to promote interest in insurance coverage, as long as the material is not misleading or exaggerates the terms of benefits of the policy.)
All of the following statements about mutual insurance companies are correct EXCEPT A) policy dividends issued by mutual companies are guaranteed and not taxable B) dividends allow policyholders to share in a mutual company's divisible surplus C) dividends are a return of unused premiums D) mutual companies issue policies referred to as participating
A) policy dividends issued by mutual companies are guaranteed and not taxable (insurance policy dividends are NOT guaranteed and are not taxable)
An insured suffered a loss and notified her insurance company. The insurer must provide a claim to the insured within: A) 1 year B) 15 days C) 90 days D) 6 months
B) 15 days (According to the claim forms provision, the insurer must provide a claim form to the insured within 15 days of being notified of the loss)
In Minnesota, Medicare supplement insurance policies must provide a free-look period of: A) 20 days B) 30 days C) 45 days D) 10 days
B) 30 days (the free-look provision must provide to the insured a period of 30 days in which the policy may be returned for cancellation and a full refund of the premium paid)
A licensed producer moved from an apartment to a house on January 1st. By what date must the producer notify the commissioner in the change in address?: A) by March 31st B) Straight Life C) By January 31st D) By January 14th
B) By January 10 (producers have 10 days to notify the commissioner when they have changed residence or work address)
Which of the following whole life policies charges a level annual premium for the lifetime of the insured: A) Increasing Term B) Straight Life C) Limited-pay whole life D) Level Term
B) straight-life (straight-life is a kind of whole life policy that charges a level annual premium for the lifetime of the insured)
An individual recently lost her job. She intends to convert her group policy to an individual policy. In order to avoid proving insurability, the conversion must occur within: A) 61 days B) 30 days C) 31 days D) 60 days
C) 31 days (this individual is not required to prove insurability, as long as the conversion occurs within 31 days of termination)
What does Basic Medical Expense cover? A) all office visits, under any circumstances B) surgery C) Nonsurgical services a physician provides D) X-ray charges
C) Nonsurgical services a physician provides (Basic Medical Expense Coverage is often referred to as Basic Physicians Non-Surgical Expense Coverage because it provides coverage for nonsurgical services a physician provides. The benefits, however, are usually limited to visits to patients confined in the hospital. Some policies will also pay for office visits. There is no deductible with benefits, but coverage is usually limited to a number of visits per day, limits per visit, or limits per hospital stay.
A producer who failed to comply with the state continuing education requirement is guilty of a: A) felony B) first degree offence C) class A violation D) misdemeanor
D) misdemeanor (Any person failing to comply with any of the state continuing education provisions, or any person acting in any manner in the negotiation of transaction of unlawful insurance with an insurance company not licensed to do business in MN, or violating any provision of law relating to the negotiation or effecting of contracts of insurance, is guilty of a misdemeanor)
What is the cost of coverage based on for group life insurance?: A) The average age B) the ratio of men to women C) the insureds' individual ages D) The average age and the ratio of men to women
D) the average age and the ratio of men to women (One of the aspects of group underwriting that differs from individual insurance is that the cost of the coverage is based on the average of the group and ratio of men to women)
If the policy summary for a life insurance policy is not given when the application is taken, when must the policy summary be given to the policyowner? A) within 15 days of the application date B) within 30 days of the policy issue C) when the policy is issued D) when the policy is delivered
D) when the policy is delivered (the policy summary must be provided when the policy is delivered to the owner)
When producers change the address of their residence or office, the Commissioner must be notified within A) 15 days B) 30 days C) 60 days D) 10 days
D) 10 days (producers have 10 days to notify the commissioner when they have changed residence or work address)
No life insurance policy or certificate may be issued or delivered by an insurer organized in MN until it has been approved by: A) the internal revenue service B) the governer C) the insurance commissioner D) the National Association of Insurance Commissioners
C) The insurance Commissioner (no life insurance or annuity contract may be issued or delivered in Minnesota by a life insurer until it has been approved by the commissioner)
What is the maximum fine for life insurers who allow producers to transact insurance for them without appointments? A) $25 B) $50 C) $100 D) $150
A) $25 (if a producer transacts insurance before an appointment with an insurer is granted, the insurer will have to pay a fine of $25 per offense (maximum $300)
In a homeowners policy, which of the following coverages provides protection against bodily injury and property damage claims against the insured?: A) Coverage E B) Coverage B C) Coverage C D) Coverage D
A) Coverage E (in a homeowners policy, Coverage E (personal liability) provides protection against bodily injury and property damages against the insured.)
All of the following are consideration in an insurance policy EXCEPT: A) the cash value in the policy B) the statement on the application C) the premium paid at the time of application D) the promise to pay covered losses
A) The cash value in the policy (consideration is the value offered by the insured to the insurer, and vice versa. The insured makes accurate statements in the application and remits premium payments. In exchange, the insurer provides benefits as stipulated in the contract)
Which of the following characteristics is NOT relevant to the underwriting of group life insurance policies? A) purpose B) Turnover C) Financial Strength D) Marital Status
D) Marital Status (there are certain group characteristics that the underwriter will consider before issuing a policy. These characteristics include the group's purpose, size, turnover, and financial strength)
When producers change the address of their resident or office, the commissioner must be notified within: A) 60 days B) 10 days C) 15 days D) 30 days
B) 10 days (producers have 10 days to notify the commissioner when they have changed residence or work address)
An individual recently lost her job. She intends to convert her group policy to an individual policy. In order to avoid proving insurability, the conversion must occur within. A) 60 days B) 61 days C) 30 days D) 31 days
D) 31 days (this individual is not required to prove insurability, as long as the conversion occurs within 31 days of termination)
A licensed producer moved from an apartment to a house on January 1st. By what date must the producer notify the commissioner of the change in address? A) By march 31st B) By January 10th C) By January 31st D) By January 14th
B) by January 10th (producers have 10 days to notify the commissioner when they have changed residence or work address)
In a homeowners policy, which of the following coverages provides protection against bodily injury and property damage claims against the insured? A) coverage D B) coverage E C) coverage B D) coverage C
B) coverage E (in a homeowners policy, coverage E (personal liability) provides protection against bodily injury and property damage claims against the insured)
In replacement, an existing insurer must provide policyowners with a policy summary for existing life insurance within how many days of receiving the written communication and replacement? A) 3 business days B) 5 business days C) 10 calendar days D) 30 calendar days
B) 5 business days (existing insurers must provide policyowners with a policy summary for the existing life insurance within 5 business days of receiving the written communication and replacement)
When completing a life insurance application the applicant realizes that she should have answered an earlier question differently. What should the agent do to make the necessary change? A) nothing, only a company officer can make any changes B) cross out the incorrect information, write in the correct answer and have the applicant initial the change C) white-out the information, make the change, and have the applicant initial the change D) cross out the incorrect information and provide the explanation to the insurance company
B) cross out the incorrect information, write in the correct answer and have the applicant initial the change (if change is necessary in the application, the agent can have the applicant complete a new application. Some insurers will allow the mistake to be corrected on the application with the applicant's accompanying initialization of the changes. Using the agents initials will not be accepted)
Which of the following policy provisions is a general statement identifying the insured, the insurance company, and the types of loss that will be covered? A) assignment B) ownership C) insuring clause D) entire contract
C) insuring clause (the insuring clause is a general statement identifying the insured, the insurance company, and the types of loss that will be covered)
All of the following are excluded from coverage in an individual health insurance policy EXCEPT: A) purely cosmetic surgery B) treatment received in a government hospital C) Mental Illness D) experimental procedures
C) mental illness (mental illness is covered, with some limitations)
All of the following are true of credit life EXCEPT: A) The death benefit cannot exceed the amount of the loan B) The premium payment is included in the loan payment C) the creditor is the policyowner D) the insured names the beneficiary
D) The insured names the beneficiary (With credit life the lending institution is the owner and names the beneficiary)
All of the following are true of the Survivorship Life policy EXCEPT: A) it can insure more than 2 lives B) the premium is based on the age of each insured C) the death benefit is not paid until the last death D) the premium would be lower than in a joint life policy
D) The premium is based on the age of each insured. (Survivorship life "second-to-die" policy is much the same as joint life in that it insures two or more lives for a premium that is based on a joint age)
Which statement is an accurate description of life insurance dividends? A) they are paid as a return of premium to policyowners by stock insurers B) they are guaranteed to be paid and they are taxable income C) they are likely to be larger in nonparticipating policies D) they are not taxable and not guaranteed
D) they are not taxable and not guaranteed (policy dividends, considered a return of excess premiums by a mutual insurer, are not taxable since the original premium was paid with after-tax dollars. Future dividends cannot be predicted or guaranteed.
The state of MN hsa enacted a plan designed to promote the availability of health insurance to small employers. To be eligible for coverage, which of the following requirements must be met? A) the business must employ 2 people on 50% of its working days B) 100% of eligible employees must participate in a plan C) the employer may not have up to 100 employees D) employees to be covered must meet medical insurability standards
A) the business must employ 2 people on 50% of its working days (A small employer means a person, firm, corporation, partnership, association or other entity actively engaged in businesses that on at least 50% of its working days, during the preceding 12 months employed at least 2 and no more than 50 employees, the majority of whom were in employed in MN. a small employer is entitled to coverage on a guaranteed basis as long as it has 75% of its eligible employees participating in a health benefit plan.)
An insured was diagnosed two years ago with kidney cancer. She was treated with surgeries and chemotherapy and is now in remission. She also has a 30-year smoking history. The insured is now healthy enough to work and she has just started a full-time job. Which describes the health insurance that she will likely receive? A) she would be covered under her employer's group health insurance plan, but she would pay higher premiums than the other employees. B) she would be accepted under an insurance policy, provided that a rider excluding cancer-related conditions is attached. C) She would be covered under her employer's group health insurance plan, without higher premium. D) she would be denied coverage due to the risk possessed by her prior medical history.
C) she would be covered under her employer's group health insurance plan, without higher premiums (because the insured was hired for a full-time job, she would be eligible for her employer's group health insurance plan. Group plans cover employees equally, regardless of their age, gender, and past medical history.
With adjustable life, the owner can change all of the following EXCEPT: A) the insured B) the death benefit C) the premium D) the length of time the coverage will last
A) The insured (the mortality charge is determined by the actuary in the home office. the owner of the policy has no control over this mortality cost)
An insurance agent visits a potential client and explains various types of policies. The customer displays a lack of interest, so the agent guarantees higher dividends than he knows would be possible. Which terms describes what the agent has done? A) misrepresentation B) rebating C) twisting D) defamation
A) misrepresentation (misrepresentation is the act of portraying sales material that is false, misleading or deceptive as to policy benefits or terms, the payment of dividends, etc. This refers to all forms of communication)